1981 (10) TMI 60

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....ed by the ITO. The firm follows the calendar year as its previous year. Sri Ram Chandra expired on 24th July, 1973. In accordance with the terms of the cl. (7) of the partnership deed Smt. Sakhi Bai was admitted as a partner w.e.f. 25th July, 1973 in the place of Sri Ram Chandra. A new deed was executed on 21st Aug., 1973. The ITO granted registration under s. 185(1) on 22nd March, 1976. Later he observed that the profit for the period during which Smt. Sakhi Bai was a partner in the firm had not been credited to her A/c but the profit for the entire period, namely the calendar year 1973 had been credited to her A/c but the profit for the entire period, namely the calendar year 1973 had been credited to the A/c of Sri Ram Chandra. The ITO c....

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.... the decision of the Allahabad High Court in Setha Ram Dhanvir Singh vs. CIT (1980) 123 ITR 150 (All). 3. Before us, the ld. counsel for the assessee pleaded that registration once granted cannot be cancelled unless the firm was found to be not genuine. In the facts of the case, it was submitted that the mere crediting of the profit in Ram Chandra's account could not lead to the conclusion that the firm was not genuine. In fact the profits had been distributed in the course of two subsequent years. It was argued that what Smt. Sakhi Bai received included the share of profits of Rs. 14,074.24 due to her for the period 25th July, 1973 to 31st Dec., 19733. The ld. Depl. Rep. relied on the order of the AAC. It was his contention that the gen....

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..... As Smt. Sakhi Bai has received her share of profits, the firm is genuine. 5. We have also gone through the judgment of the Allahabad High Court. The facts of that case are clearly distinguishable. In that case the division of profit or loss between the partners was not in accordance with the terms of the partnership deed. Here in the present case, the other two partners, namely Sri Udhodass and Sri Gurnamal have received their due shares of profits. Only the profit due to Smt. Sakhi Bai got credited in a wrong A/c. From the facts narrated by us, it is possible to conclude that Smt. Sakhi Bai had received her share of profits for the period 25th July, 1973 to 31st Dec., 1973. Moreover the decision of the Allahabad High Court is based on....